Though checks make up an increasingly smaller fraction of transaction volume in the US, they are still a lot higher here than in Europe. As such, federal and many state legislators have not caught up with the effects of a hybrid system, where they attempt to regulate electronic banking transactions under the same rules as paper checks.

Many people like making mobile deposits, rather than going into the bank, or snail-mailing the deposits in. But what happens if a check gets mobile-deposited to two banks? Or, since many banks don’t actively check mobile deposits closely, what if someone repeatedly deposits a check to his bank, while altering the check number?

The latter scenario happened to me, and I am out a considerable amount of money because I was not following my accounts closely.

My soon-to-be former bank would not reimburse the losses, citing the account agreement, even though they facilitated the thefts by not checking the drafts against my account.

The same was true of the bank of the fraudster, which accepted the same altered check again and again.

The state of Maryland would not prosecute fraud charges against the person, because the crime was not committed inside a bank branch, and they could not conclusively prove that the perpetrator did the crime, even though all of the money went to his account. And,that is even though the perpetrator admitted it to me, and I have it in writing.

Thus, I have an informal agreement with the perp to pay me back or face a tort claim. His situation is not strong, and you can’t squeeze blood from a stone. I could force him into bankruptcy, but what good would that for me? I’m not vengeful.

So what is the best defense? Check your transactional accounts weekly if not daily. On that level, the banks will take the losses, if you identify them fast enough.

I began doing that recently, and found someone using one of my credit cards to pay his phone bill. I have since reversed most of those charges. GIven that many vendors try to induce you into payment plans that auto-renew, it is wise for that reason to do so, that you would cancel services that you no longer use.

So what can I say? I could have not written this up, but I am not perfect in my personal money management… better that others learn from my mistakes. Until the state and Federal governments get their acts together, you are your own best defender. Check your transactional accounts frequently. The money you save will be your own.